Debt exchange programme is an orderly way to restore economy back on track – Ofori-Atta

Ken Ofori-Atta

The debt exchange programme that was introduced by the government in the 2023 budget will help in restoring the Ghanaian economy back on the right direction in order to create jobs and protect income of the people, Finance Minister Ken Ofori-Atta has said.

Launching the programme in Accra on Monday December 5, he said the government expects an overwhelming support for the programme.

He said after citing best practices in countries such as Greece, that the debt exchange programme “is an orderly way to put our economy back on track in order to create jobs, protect income and restore hope to the Ghanaian people.”

“The govt expects overwhelming support for this exchange programme,” he stressed.

He further dismissed speculations that there is going to be haircuts following the programme.

“There will be no haircuts,” he said.

He further justified the introduction of the debt exchange programme.

He stated that it has become necessary because of the enormous challenges with debt servicing.

He revealed that debt servicing is consuming “almost of government’s revenue and also 70 per cent of tax revenue.”

“Which is why we are announcing this to restore our capacity to service debt,” he stressed.

Under the debt exchange programme, he said, ” domestic bond holders will be asked to exchange their instruments for new ones.”

He added “Existing domestic bonds as of 1st December will be exchanged for a set of four new bonds maturing in 2027, 2029, and 2037.”

The annual coupons on all of these bonds will be set at 0 % in 2023, 5% in 2024 and 10% from 2025 until maturity.

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“Coupon payments will be semi annual ‘ he stressed.

 

By Laud Nartey|3news.com|Ghana